Cameco: U-mine delays tied to duplication of agency regs

Cameco Resources president Paul Goranson is optimistic about the future of Wyoming uranium despite what he called "regulatory uncertainty" at the federal level.

"Our operations in Wyoming still remain competitive," Goranson said during a meeting of Wyoming's Select Federal Natural Resource Management Committee this month in Riverton. "In Campbell County we just opened up a new operations (and we have) planned satellite operations on the Gas Hills down the road. ... There are timelines to start construction there and be in operation as soon as possible."

However, he said the Gas Hills project in Fremont and Natrona counties already would be in operation if Cameco did not have to develop an Environmental Impact Statement and meet other federal requirements in order to obtain a drilling permit.

"The Gas Hills project (is taking) nine months to a year and a half longer than it was supposed to," Goranson said.

Part of the problem has to do with duplication between the Nuclear Regulatory Commission and the Bureau of Land Management. Goranson both agencies now are involved in the permitting process for uranium mining.

"This process creates a great amount of uncertainty in our planning," Goranson said.

The uranium industry has experienced a "rather strong retraction" in recent years, Goranson said, with Cameco announcing a reduction in its long-term production target in 2012 in an effort to manage costs. He said the United States' "rather rigorous" regulatory approval process is part of the problem.

"What we've seen is a very extended licensing permitting time," Goranson said. "It's not an easy path to go from discovery to operation."

When global uranium prices peaked at about $130 per pound in 2007 and 2008, Goranson said production did not increase in the United States like it did in the rest of the world.

"What you see is basically a flat production line," Goranson said. "A lot of producers weren't able to take advantage of high markets. And now we have new producers coming online (at) the worst time."

The price of uranium hit a seven-year low of about $39 this month, he said. But most companies like Cameco have realigned their business plans to accommodate the price cycles - and increased regulations from Washington, D.C.

"We have to learn to manage our costs and manage the increased timelines for project approvals," Goranson said. "We'll try to do our best so we don't miss the next boom."

Global market

He talked about opportunities overseas as well. According to the company's website, Cameco operates mines in Canada, the United States and Kazakhstan and is responsible for about 14 percent of the world's uranium production.

Wyoming Sen. Jim Anderson, R-Glenrock, asked Goranson how the permitting process in the United States and Wyoming in particular compares to the experience in foreign countries.

"Some of the investigations I did in looking at world trade led me to Kazakhstan," Anderson said. "They're already out there in the world marketing their product and doing it pretty actively. As we see other less-developed countries come up on the competitive scene ... is it going to be even more difficult for you to compete in that world market than it is now given the conditions we're talking about that you have to deal with?"

Goranson said the regulatory process adds an element of risk whenever Cameco decides to initiate an operation in the United States. In contrast, he said the government in Kazakhstan has decided to focus on uranium.

"(They want to) control the uranium market, and they're getting there," he said.